Rain Industries - An oversold de-leveraging play

Dear @1.5cr,
I am sorry about your frustration but it reminds me of the popular Peter Lynch quote that “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” Lets be frank, none of us can be absolutely sure about the market direction. However, there are two kinds of investors I come across nowadays. Ones like you feel that a correction is due because market is overbought and highly valued. Time has passed since Brexit, Surgical strike, Trump Win, Indo-China stalemate, North Korea nuclear threat etc. Yet market still looks strong after India’s rating upgrade. Second type of investors I come across look at the macro picture and say that all the economic reforms in last 1-2 years would eventually reflect in improved earnings sooner or later rationalizing the valuations. The second type still is fully invested and making money alongwith proving Lynch’s quote as correct so far. There is nothing wrong in taking a contrarian bet, but if it is resulting in frustration because of loss of money and opportunity cost, then in my opinion, it is good to review it. I agree with you that there are hardly any undervalued pockets in the current markets. That’s why value investing loses relevance in a bull market and growth investing gains prominence. Staying with growth stories in current market can make much more money than looking for undervalued pockets. In bull market valuations go for a toss, and for this very reason, till Rain’s story is ripe one must try and stay with it. Rain being cheap at 280-300 and steep at 400 is just mental maths which seems to make us feel more intelligent. However, in reality, market is smarter than all of us, and each one of us is better off being a part of the trend rather than predicting it or taking contrarian bets.
http://awealthofcommonsense.com/2014/08/peter-lynch-stock-market-losses/

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